ESR-REIT has announced a 4.5% year-on-year increase in its core Distribution per Unit (DPU) to 11.250 Singapore cents for the first half of 2026. This growth is attributed to higher core earnings and improved asset performance, despite a slight dip in gross revenue and net property income due to the divestment of non-core properties.
The real estate investment trust’s gross revenue and net property income decreased by 0.3% and 2.2% respectively, primarily due to the sale of 10 non-core properties. However, positive rental reversions and increased occupancy rates helped offset these declines. On a same-store basis, gross revenue and net property income grew by 2.3% and 0.7% respectively.
In a strategic move to enhance its portfolio, ESR-REIT plans to acquire six freehold logistics assets in Australia. This acquisition is expected to be 5.1% DPU accretive and is being made at a 1.6% discount to valuation. The acquisition aims to address the portfolio’s land lease decay issue and improve long-term income resilience.
Chief Executive Officer Adrian Chui stated, “The successful divestment of non-core assets unlocked value and facilitated the timely recycling of the sale proceeds into six freehold institutional-grade logistics properties in Australia.”
The trust’s gearing stands at 41.4%, with plans to reduce it to 39.9% following the redemption of S$125m of unsecured notes. This financial manoeuvre is expected to further strengthen ESR-REIT’s position for sustainable long-term earnings growth.
